In this study, we establish a theory for dynamic behaviors of an automatic ball balancer, analyze its dynamic characteristics, and provide its design guide line. Equations of motion are derived by using the polar coordinate system instead of the rectangular coordinate system which was previously used in other researches. After nondimensionalization of the equations, the perturbation method is applied to locate the equilibrium positions and to obtain the linearized equations of motion around the equilibrium positions. The Eigenvalue problem is used to verify the dynamic stability around the equilibrium positions. On the other hand, the time responses are computed from the nonlinear equations of motion by using a time integration method.